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RealTime Economic Issues Watch

In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.

Recent Posts

Alibaba IPO Underlines Rise of Chinese Private Sector

by | September 9th, 2014 | 10:11 am

On Friday, September 5, Alibaba Group filed details about its forthcoming initial public offering (IPO), suggesting a mid-range valuation of US $155 billion. This would make the Hangzhou-based web retailer the most valuable listed private-sector company headquartered on the Chinese mainland, ahead of its Shenzhen-based online rival Tencent Holdings. Alibaba’s coming of age underlines a […]

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Did Putin Win in East Ukraine?

by | September 8th, 2014 | 09:47 am

Did Putin win in east Ukraine? The short answer is “yes,” at least on the geopolitical chessboard. In economic terms, the victory will prove costly to Russia. To understand Putin’s victory, it’s helpful to reach back 80 years to the League of Nations sanctions imposed against Italy in 1935, in a futile effort to reverse […]

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The ECB Throws down the Gauntlet

by | September 5th, 2014 | 02:22 pm

The European Central Bank (ECB) surprised financial markets on September 4 by announcing an interest rate cut of 10 basis points, a new program to purchase asset-backed securities (ABS) in the nonfinancial sector, and another round of purchases of covered bank bonds. The ECB was responding not only to the recent deterioration in the European […]

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How Markets and Soccer Could Impede Scottish Independence

by | September 4th, 2014 | 12:37 pm

Recent polls suggest that support for Scottish independence is growing, and the once comfortable lead by opponents has diminished with the approach of the September 18 referendum. The pro–Great Britain supporters lead only 48 to 42 percent, with 10 percent undecided. Suddenly, a victory for the Scottish independence camp no longer seems implausible, and financial […]

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A Sensible Step to Mitigate Sovereign Bond Dysfunction

by | August 29th, 2014 | 04:57 pm

Lingering fallout from the debt crises in Argentina and Greece exposed serious flaws in the sovereign debt restructuring process: Small groups of creditors were able to extract preferential treatment and cause serious disruptions for everyone else. On August 29, 2014, the International Capital Market Association (ICMA) released a new set of model clauses for foreign […]

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Draghi Yields to Reality in Jackson Hole

by | August 29th, 2014 | 02:31 pm

On August 22 in Jackson Hole, Mario Draghi, president of the European Central Bank (ECB), achieved an important breakthrough in the thinking of euro area authorities. He did so by acknowledging for the first time that inflation expectations could become unanchored from the central bank’s 2 percent target, declining dangerously below that level and requiring […]

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Hollande Doubles Down to Impress Europe

by | August 27th, 2014 | 02:27 pm

With his third government reshuffle since taking office in 2012, President François Hollande of France has ditched the most prominent left-wing members of his cabinet and acknowledged that a “team of rivals” does not work for a weak president like himself. Facing record low approval ratings at home and skeptical European partners in Berlin, Frankfurt, […]

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Europe’s Sluggish Economy and Gender Disputes Are Disrupting EU Politics

by | August 22nd, 2014 | 09:03 am

European leaders are holding a special summit on August 30 to fill two remaining top EU jobs, and another long night in Brussels could be in the offing. Failure to agree (again) on a successor to Herman van Rompuy, president of the European Council, and Catherine Ashton, the high representative of the European Union for […]

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Is the West to Blame for Russia’s Aggression in Ukraine? Of Course Not!

by | August 20th, 2014 | 01:11 pm

John J. Mearsheimer is supposed to be one of the foremost American international relations theorists. But his article, “Why the Ukraine Crisis Is the West’s Fault,” in the latest issue of Foreign Affairs, shows his contempt for democracy, national sovereignty, and international law. His thesis is that Russia has the right to decide the fate […]

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Taking Stock of the United Kingdom’s Funding for Lending Scheme

by | August 8th, 2014 | 08:59 am

During the tense summer of 2012 while the European sovereign crisis was in full bloom, the Bank of England (BOE) announced plans to launch an innovative new program to ameliorate the persistently high and rising costs of financing—especially to the United Kingdom’s 5 million small- and medium-sized enterprises (SMEs). This program, which was dubbed the […]

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